What is 'Cloud Computing'

Cloud computing is a model for delivering information technology services in which resources are retrieved from the internet through web-based tools and applications rather than a direct connection to a server. Data and software packages are stored in servers; however, a cloud computing structure allows access to information as long as an electronic device has access to the web. This type of system allows employees to work remotely.

BREAKING DOWN 'Cloud Computing'

Cloud computing is so named because the information being accessed is found in the "cloud" and does not require a user to be in a specific place to gain access to it. Companies may find that cloud computing allows them to reduce the cost of information management since they are not required to own their own servers and can use capacity leased from third parties. Additionally, the cloud-like structure allows companies to upgrade software more quickly.

Cloud Advantages

Before the cloud became a viable alternative, companies were required to purchase, construct and maintain costly information technology (IT) infrastructure. Accessing software through the cloud eliminates logistical problems and provides readily available platforms for users across an expansive geographical spectrum. Thus, the pace at which businesses embrace and utilize internet-based systems is quickened. Oracle Corporation picked up 3,600 customers and $690 million in its 2015 fourth-quarter revenue from its cloud business.

One of the main advantages of cloud computing extends to software companies that can offer their products via the web rather than through more traditional methods involving discs or other tangible means. In 2013, Adobe Systems announced all subsequent versions of Photoshop, as well as other components of its Creative Suite, would only be available through an internet-based subscription. Photoshop utilizes cloud storage, but no processing is completed through the internet.

Software as a Service

Cloud computing platforms allow software as a service (SaaS) companies to hold many advantages over application software deployed through physical modes. One of the most pervasive applications involves teleconferencing or gathering remote meeting participants who share audio, video and presentation capabilities via the internet. Citrix Systems' GoToMeeting allows users to quickly download an application that creates a remote meeting environment in which participants collaborate regardless of location. The only hardware and software requirements are a desktop or mobile computing device and an internet connection.

Disadvantages of Cloud Computing

Data breaches have become common headlines as sensitive information makes its way into the hands of malicious hackers who may delete or manipulate data with the sole intent to harm. Encryption of data protects vital information but if the encryption key is lost, the data disappears. Servers maintained by companies that offer cloud computing services can fall victim to a natural disaster rendering data incapable of being recovered.

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